Which of the Following Is True

question 208

Multiple Choice

Which of the following is true?

• A) Investment in the stock market is a relatively foolproof method for an investor to earn a high rate of return during the next five years.
• B) Current stock prices already reflect information that is known with a high degree of certainty.
• C) Experts are able to predict changes in the direction of the broad stock market indexes with a high degree of accuracy.
• D) While changes in the prices of specific stocks are difficult to predict, it is relatively easy to predict the future direction of the broad stock market.
• E) Both c and d are true.

---

Definitions:

Opportunity Cost

Opportunity cost refers to the value of the next best alternative foregone as the result of making a decision.

Corn

A cereal plant that yields large kernels set in rows on a cob, a staple food in many parts of the world.

Absolute Advantage

A situation where an individual or entity can produce more of a good or service with the same amount of resources compared to others.

Input Requirements

The set of resources, materials, and labor needed for the production of goods or services.